ADB signs deal to help promote Islamic finance

MoU will help in strengthening the capacity of regulating and supervising Islamic financial services institutions.
ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: The Asian Development Bank (ADB) and Islamic Financial Services Board (IFSB) signed a memorandum of understanding (MoU) to facilitate international cooperation between the two organisations in promoting the development of Islamic finance in member developing countries, said an ADB press statement on Tuesday.

Dubai Islamic Bank Pakistan, First Habib Modaraba, Habib Bank and State Bank of Pakistan are listed as members of the IFSB, according to the board’s website.

The agreement provides an effective basis for joint activities and cooperation in areas of common interest. It will help promote the development of Islamic finance, in particular strengthening the capacity of regulating and supervising Islamic financial services institutions, Islamic capital markets and Islamic liquidity management in common developing member countries.

The agreement was signed by ADB Vice President for Knowledge Management and Sustainable Development, Bindu Lohani and IFSB Secretary-General Jaseem Ahmed on behalf of their institutions in Manila.

“The importance of Islamic finance in development of Asia cannot be doubted, as it can be seen by the significant increase in Shariah-compliant financing in a number of member countries in recent years,” said Lohani. “We look forward to working even more closely with the IFSB. This MoU will address key issues facing our member countries in financial inclusiveness and infrastructure financing,” he added.

On the occasion, Ahmed said, “In the context of Asia’s developmental needs, and the expanding potential for Islamic finance in the region, the agreement strengthens our ability to jointly support the policy, institutional and capacity requirements for a more resilient Islamic financial sector.”